Resource Piling Pte Ltd v Geospecs Pte Ltd [2013] SGHC 231

Case Number : Suit No 343 of 2011

Decision Date : 05 November 2013

Tribunal/Court : High Court

Coram : Quentin Loh J

Counsel Name(s) : Leo Cheng Suan and Teh Ee-von (Infinitus Law Corporation) for the plaintiff;Thomas Tan and Lai Kwan Wei (Haridass Ho & Partners) for the defendant.

Parties : Resource Piling Pte Ltd — Geospecs Pte Ltd

Tort – Negligence

5 November 2013 Judgment reserved.

Quentin Loh J:

1 The plaintiff, Resource Piling Pte Ltd (“Resource Piling”), carries on the business of a pilingcontractor and also conducts related engineering works. The defendant, Geospecs Pte Ltd(“Geospecs”), is a company which specialises in soil investigation works, slope stabilisation, laboratorytesting and related works. Resource Piling is suing Geospecs in tort, alleging that Geospecs hadnegligently carried out soil investigation works and had produced inaccurate borehole logs whichResource Piling relied upon to tender for a piling contract.

Background facts to the dispute

The soil investigation contract

2 HH Properties Pte Ltd (“the Developer”), wanted to develop two hotel blocks of 15 and 18-storeys, a 13-storey office block and basement car parks (“the Project”) on a site between BalestierRoad and Ah Hood Road, Lot 09941T Mukim 17 (“the Site”). The Developer engaged Longrove &Associates (“Longrove”) as its consultant civil structural engineer and Longrove required the usual soilinformation and data to design the foundations. The Developer, through Longrove, called for tendersfor the soil investigation. On 15 June 2009, Geospecs submitted a tender to carry out the required soilinvestigations works at the Site. On 7 July 2009, Longrove – on behalf of the Developer – awardedthe soil investigation contract to Geospecs for the sum of $20,500 excluding GST and rock coring(“the Soil Investigation Contract”).

3 The site was divided into two plots by a reserve along which the Mass Rapid Transit (“MRT”)line between Novena and Toa Payoh stations ran. The larger polygonal plot lay to the West of thereserve (“the Western Plot”) whilst the smaller polygonal plot lay to the East (“the Eastern Plot”).Geospecs conducted a field exploration programme from 20 August 2009 to 23 September 2009 anddrilled a total of 11 boreholes on the Site, BH-1 to BH-11. On the Western Plot, BH-1 and BH-2 wereto the west with BH-1 to the north of BH-2. BH-3 and BH-4 were in the centre, with BH-3 to thenorth of BH-4. BH-5, BH-6 and BH-7 were drilled in a line along the eastern edge with BH-5 to thenorth and BH-7 to the south. On the smaller Eastern Plot, BH-8 and BH-9 were on the western sidewith BH-8 to the north of BH-9, and on the eastern side, BH-10 was to the north of BH-11.

4 On 29 September 2009, Geospecs submitted its site investigation report (“the Report”) – whichincluded borehole logs for the 11 boreholes (“the Geospecs Logs”) and the usual soil test data andanalyses – to Longrove. The Geospecs Logs indicated that rock was only encountered in two of theboreholes, BH-5 and BH-6 (which were at the North-eastern corner of the Western plot), at depths of18.00m and 18.70m respectively.

The Piling Contract

5 On 5 October 2009, Resource Piling received a letter from Longrove inviting tenders for thepiling work which called for bored piles ranging from 600mm to 1200mm in diameter. The tenderdocuments issued by Longrove (“the Tender Documents”) contained the following general

specifications (“the General Specifications”): [note: 1]

GENERAL SPECIFICATION

...

1.6 Site Investigation Report

An extract of the Soil Investigation Report is enclosed in the Appendix for information.

The Contractor should note that he has to satisfy himself as to the actual type of strata,geotechnical nature of the underlying stratum and ground conditions to be encountered duringthe works. It is to be at the risk of the Contractor if difficult ground conditions are actuallyencountered on the site.

If a Contractor wishes to perform investigation, which may involve excavation, sounding, orboring before submitting his tender he may do so at his own expense and arrangement could bemade with the Engineer.

...

1.10 Obstructions

An obstruction is defined as material the excavation of which requires additional effort. Uponencountering an obstruction, the Contractor shall immediately inform the Engineer and shall agreewith the Engineer the method to be employed in removing the obstruction.

...

No claim for additional cost or time shall be allowed or excavation through obstructions anddifficult ground conditions no matter how adverse or for the removal of boulders.

The Tender Documents also contained the following specifications relating to the bored piles (“the

Bored Pile Specifications”): [note: 2]

SPECIFICATION FOR CAST IN PLACE CONCRETE BORED PILES

...

1.2 Site Conditions

1.2.1 The Contractor shall be deemed to have inspected the site and satisfied himself with regardto access, site conditions, existing buildings and structures.

1.2.2 The Contractor shall satisfy himself regarding subsoil conditions and the underground watertable.

1.2.3 The soil report included in this contract is for the reference of the Contractor only. Neitherthe Consultants nor the Client accept responsibility for its accuracy or implications, if actual soilconditions are found to be different during progress of works.

No claims for extra cost or time shall be entertained on these grounds.

1.2.4 The Contractor may at his own cost and with the written approval of the Engineer, conductadditional soil tests if he so desires.

...

4.2 Boring

...

4.2.4 Rates for boring shall be based on whatever ground conditions are found. No extra cost ortime shall be allowed for boring through more difficult soil conditions than those envisaged by theContractor.

...

The Geospecs Logs were included in the appendix to the Tender Documents but the full Reportincluding the soil test data and analyses were not included. Resource Piling allegedly relied on theGeospecs Logs to calculate the tender price and submitted its tender to the Developer on 21 October2009, the closing date for the tender, which was about 16 days after the date of the invitation totender.

6 Resource Piling was successful and the Developer awarded the piling contract to Resource Pilingfor the sum of $3,608,488.41 (“the Piling Contract”) on 24 December 2009. The contract price wascalculated according to per metre rates based on the provisional lengths of the bored piles. The

material terms of the Piling Contract are set out below as follows: [note: 3]

1. CONTRACT SUM

...

The above price/unit rate shall include:

...

o) Any coring/chiselling/socketing into rock or use of special tools/equipments;

...

You agree that the Contract Sum shall cover your obligations under the Contract and all works

and expenditure necessary to carry out and bring the Works to completion. This shall include allancillary works or processes which are indispensably necessary and may continently becomenecessary to achieve completion whether described or otherwise in the face of practicaldifficulties or for other technical reasons.

..

2. CONTRACT DOCUMENTS

The following letters and documents shall constitute integral parts of the Contract:-

...

c) M/S Longrove’s Specifications ref. GS/1 to GS/11, BP/1 to BP/18 and Appendix for the Borehole Log.

e) This letter. The terms and conditions stipulated in this letter shall prevail in the event of anyinconsistency between the terms and conditions stated in the earlier letters and documentsidentified above.

...

7. SCOPE OF WORKS

...

You shall deem to have inspected and examined the site and acquaint yourself as to the form andnature of the site condition. No claim whatsoever made by you on ground of want of knowledgeof any of the aforesaid will be entertained.

...

11. CONTRACTOR’S OBLIGATION

...

d) The Contractor shall be deemed to have inspected and examined the Site and its surroundingsand to have satisfied himself before submitting the tender as to the nature of the ground andsub-soil and the form and nature of the Site and in general to have obtained for himself allnecessary information as to risks, contingencies and all other circumstances influencing thetender.

16. WARRANTIES

...

b) No warranty or representation as to the accuracy and/or quantities and/or informationcontained in any plans and/or drawings provided to the Contractor is made by the Employer normay be implied against the Employer. The Contractor shall check the accuracy of all plans and/ordrawings and to satisfy himself accordingly. In the event that there are any inaccuracies and/ordiscrepancies in the drawings and/or plans then it shall be the Contractor’s responsibility to bringsuch matters to the attention of the Employer. In so far as the Contractor intends to make any

claims or to seek any extension of time as a result of any inaccuracy and/or discrepancy in thedrawings and/or it plans then the Contractor shall be required to comply with the relevantprovisions in the Contract relating to claims for additional payment and for the application for andthe grant of an extension of time.

Clause 2(c) of the Piling Contract incorporated both the General Specifications and Bored PileSpecifications as terms of the Piling Contract.

The piling construction

7 Sometime in January 2010, prior to the commencement of the piling works and in accordancewith the Building and Construction Authority’s (“BCA”) requirements, Resource Piling drilled andconstructed an ultimate test pile (“the UTP”). The purpose of the UTP was to verify the pile designsubmitted by the project engineer to the BCA as the UTP would be constructed and tested to at least2.5 times of the working load under the pile design. Resource Piling drilled the UTP somewhere nearthe vertical midpoint between BH-10 and BH-11, and discovered that rock was encountered from19.00m onwards.

8 Upon the UTP performing satisfactorily, Resource Piling proceeded to carry out the piling works,and claimed to have encountered ground conditions that were materially different from the conditionsindicated in the Geospecs Logs. Resource Piling subsequently engaged Soil & Foundation Pte Ltd (“S &F”) sometime around March or April 2010 to conduct additional soil investigation works on the Site.Three additional boreholes, NBH-1, NBH-2 and NBH-3, were drilled. The soil investigation reportprepared by S & F dated 22 April 2010 (the “S & F Report”) indicated the presence of rock in all threeboreholes, which were located in the vicinity of areas where, according to the Geospecs Logs, rockwas unlikely to be encountered.

9 During the course of the piling works, Resource Piling claimed that it had encountered rock in326 piles, or 77% of the piles located in the areas where no rock was expected. Resource Pilingaverred that the time taken for boring into rock was 10 to 20 times longer than the time required forboring into soil and that it had to incur additional rock socketing costs which it had not provided for inits original tender price.

10 On 4 September 2010, Mr Foo Hee Kang (“Mr Foo”), the Managing Director of Resource Piling,wrote to the Developer to request an extra payment of $1,188,554 for socketing into rock. Mr Fooclaimed that the original cost of socketing in the contract sum was calculated on the basis of theground conditions recorded in the Geospecs Logs, which were subsequently verified by S & F and

found to be inaccurate. [note: 4] The Developer replied on 18 October 2010, rejecting Resource Piling’sclaim on the basis that it was not entitled to claim for the extra costs for rock socketing under the

terms of the Piling Contract. [note: 5]

11 Resource Piling wrote two letters to the Developer on 27 October 2010, repeating its positionthat it had a contractual right to the extra payment for socketing into rock and stressing that the

Geospecs Logs were “completely inaccurate”. [note: 6] In a letter dated 12 November 2010 fromLongrove to Resource Piling certifying interim progress payments under the Piling Contract, Longroverejected Resource Piling’s “variation claim” of $1,188,554 on the grounds that the contract price wasinclusive of any coring or socketing into rock and covered Resource Piling’s obligations under the PilingContract and all work and expenditure necessary to carry out the works to completion; the contractsum was firm notwithstanding the amount or quantity of work assigned to Resource Piling. Longrovefurther stated that the Geospecs Logs had been provided to Resource Piling for information only and

Resource Piling was deemed to have inspected and examined the site – any risks arising from the

works were therefore to be borne by Resource Piling. [note: 7]

12 Sometime in November 2010, Resource Piling was allegedly informed by one Mr Babu, the ProjectManager of the Developer, that Geospecs would be drilling two boreholes adjacent to BH-1 and BH-11, numbered BH-1A and BH-11A respectively, to prove that the Geospecs Logs were accurate. Thedrilling was done in the absence of a representative from Resource Piling. The borehole logs for BH-1Aand BH-11A did not differ materially from the earlier Geospecs Logs for BH-1 and BH-11 and indicatedthat no rocks were present in both boreholes up to a depth of 27.02m. Resource Piling subsequentlyrequested S & F to drill another borehole about 0.567m away from BH-11A, numbered BH-11B. Thisborehole log indicated the presence of rock from 21.50m below the surface.

13 On 21 December 2010, Resource Piling sent a letter to the Developer stating that the soil profileindicated in the borehole log for BH-11B was entirely different from those indicated in the boreholelogs prepared by Geospecs for BH-11 and BH-11A. Resource Piling requested an explanation fromGeospecs for the difference, and stated that if no explanation was forthcoming, it would file an officialreport with the BCA that the Geospecs Logs were completely wrong and a misrepresentation to

Resource Piling at the tendering stage. [note: 8] On 24 December 2010, Geospecs responded to theissues raised in Resource Piling’s letter in an email to a representative of the Developer. Geospecsmaintained that the borehole logs for BH-11 and BH-11A were correct, and that the apparentdifferences in the soil profiles may be attributable to differential weathering of the underlying rock.[note: 9]

14 Following Geospecs’ response, the Developer sent a letter in reply to Resource Piling on 4January 2011, firmly stating that the Geospecs Logs were accurate, and that, in any event, there

were no sums due and payable to Resource Piling for the rock socketing works. [note: 10] ResourcePiling replied on 10 January 2011, reiterating that the Geospecs Logs were inaccurate and that it was

contractually entitled to the extra payment that it was claiming for. [note: 11] There is no furtherrecord of any subsequent correspondence between Resource Piling and the Developer.

15 Resource Piling issued a writ of summons against Geospecs on 12 May 2011, claiming in thealternative for: (a) the extra costs it had incurred for drilling sockets through rock; or (b) the actuallosses and losses of anticipated profit that it had incurred on the performance of the Piling Contract.At the date the trial commenced, Resource Piling had not taken any legal action against the

Developer or filed any complaint to the BCA. [note: 12]

The issues

16 The parties jointly requested, and I granted, an order for bifurcation of issues and the trialproceeded only on issues of liability. Although the lead counsels’ statements list some 15 or 16 agreedfactual issues and some three to seven agreed legal issues, as well as additional minor non-agreedissues, these can be essentially distilled into the following broad factual and legal issues:

(a) Factual Issues:

(i) What is the generalised soil profile at the Site?

(ii) What is the definition of “rock”?

(iii) Are Resource Piling’s records of the soil profiles of the boreholes accurate in that it

encountered rock in the construction of about 326 bored piles or 77% of the total number ofpiles where no rock was expected?

(iv) Were the Geospecs Logs accurate in approximately profiling the soil at the Site andthe soil conditions in the vicinity of BH-1 to BH-11?

(v) Did Geospecs carry out its soil investigation works and compilation of the GeospecsLogs properly and to the expected standard of a competent soil investigator?

(b) Legal Issues:

(i) Did Geospecs owe Resource Piling a duty of care to ensure that the Geospecs Logs itprepared were accurate?

(ii) If Geospecs did owe Resource Piling a duty of care, did Geospecs breach that duty?

The parties’ respective cases

17 Resource Piling’s claim rests on the allegation that Geospecs had negligently carried out the soilinvestigation works, prepared the Geospecs Logs that did not accurately profile the kind of soil at theSite and failed to show rock near BH-1, BH-2, BH-3, BH-4, BH-7, BH-8, BH-9, BH-10 and BH-11 whenthere was rock in the vicinity of these boreholes, and provided a soil profile in the Geospecs Logs thatwas vastly different from the actual soil conditions at the Site. Resource Piling alleged that around ormore than 77% of the piles in the zones adjacent to these nine boreholes had to be socketed intorock, contrary to what was to be expected when considering the soil profiled in the Geospecs Logs.

18 Resource Piling pleaded that Geospecs owed it a duty of care to ensure that the Geospecs Logswere accurate and reliable and had breached that duty in its negligent conduct of the soilinvestigation and preparation of inaccurate Geospecs Logs. Resource Piling was a prospective pilingcontractor bidding for the piling work for the Site, and Geospecs knew that Resource Piling would beprovided with the Geospecs Logs by the Developers to tender for the piling contract and would priceits tender based on Geospecs’ inaccurate soil information. Geospecs allegedly breached this duty by:

(a) failing to give a proper and accurate assessment of the soil conditions at the Site;

(b) failing to advise that there was rock present in the areas of the Site surrounding BH-1, BH-2, BH-3, BH-4, BH-7, BH-8, BH-9, BH-10, BH-11; and

(c) failing to detect the presence of rocks in the areas of the Site surrounding BH-1, BH-2,BH-3, BH-4, BH-7, BH-8, BH-9, BH-10, BH-11.

Resource Piling alleges that because of the widespread presence of rock, Longrove was able toreduce the length of the piles generally, which reduced Resource Piling’s payment as it was based onmeasured pile lengths. Additionally, Resource Piling incurred greater cost in pile construction by havingto socket the piles into rock, causing delays and construction difficulties. This resulted in economicloss to Resource Piling as the Developer refused to pay for such additional construction costs, allegingthat the risk was on Resource Piling under the terms of the Piling Contract. While a number of factualallegations were made in the affidavits and in the course of oral testimony that Resource Piling hadnot been able to claim extra payments for the additional socketing works because Geospecs hadincorrectly informed the Developer that the Geospecs Logs were accurate, Resource Piling did notadditionally plead this as a basis of negligence, and I will put this aspect aside.

19 Geospecs denied that it owed a duty of care to Resource Piling as a matter of law. It had onlycontracted with the Developer and had submitted the Report, Geospecs Logs, test data and resultsand recommendations for the foundation system to suit the soil conditions, duly endorsed by aprofessional engineer, to the Developer and its consultant engineers Longrove. The Report with itsattachments was prepared for Longrove to design the foundation system, estimate the costs andprepare the tender specifications to call for tenders for the Piling Contract. The Report clearly statedthat “the presence of boulders probably due to differential weathering [was] expected within the

residual layer”. [note: 13] Geospecs had not been aware, until discovery, that Resource Piling had onlybeen provided with the Geospecs Log by Longrove and/or the Developer. In any event, ResourcePiling should not have relied solely on the Geospecs Logs as it only formed part of the entire Report.

20 Geospecs also averred that it had not been negligent in the preparation of the Geospecs Logsand that the Geospecs Logs were accurate. This was confirmed by the drilling of two more boreholesin October 2010, BH-1A and BH-11A, which was witnessed by representatives of the Developer andthe Resident Engineer. Geospecs claimed that Resource Piling’s alleged encounter with rock was onlyreported to it by the Developer ten months later on 7 October 2010 and not when it was firstallegedly detected in January 2010. It was possible for the soil profiles of a particular area to differgreatly from that of neighbouring areas due to the differential weathering of different types of rocksand formations. Geospecs also questioned the accuracy of Resource Piling’s records documenting that“rock” had been encountered in the course of constructing the bored piles.

Does a duty of care arise?

21 I first address the preliminary and threshold issue of law, viz, whether a duty of care in respectof the damage suffered by Resource Piling was owed by Geospecs to Resource Piling. In SpandeckEngineering (S) Pte Ltd v Defence Science & Technology Agency [2007] 4 SLR(R) 100 (“Spandeck”),the Court of Appeal held that a single test should apply to determine the imposition of a duty of carein all claims arising out of negligence, irrespective of the type of damages claimed (at [71]) (hereafterreferred to as the “Spandeck Test”). There was no justification for a general exclusionary rule againstrecovery of economic losses (at [69]). The Court of Appeal described the two-stage Spandeck Testas follows (at [73]):

In our view, a coherent and workable test can be fashioned out of the basic two-stage testpremised on proximity and policy considerations, if its application is preceded by a preliminaryrequirement of factual foreseeability. We would add that this test is to be applied incrementally,in the sense that when applying the test in each stage, it would be desirable to refer to decidedcases in analogous situations to see how the courts have reached their conclusions in terms ofproximity and/or policy. [emphasis in original]

I now turn to consider each limb of the Spandeck Test.

Factual foreseeability

22 Geospecs argued that the loss suffered by Resource Piling, ie, the economic loss suffered as aresult of the miscalculation of the tender price, was not foreseeable as Geospecs was not aware thatthe Geospecs Logs would form part of the tender documents provided by Longrove to potentialbidders for the Piling Contract. Further, Geospecs could not have foreseen that Longrove wouldprovide only the Geospecs Logs without the rest of the Report which would have indicated thepresence of boulders. Geospecs also could not have foreseen that the piling contractor would sufferlosses due to its inability to claim extra payment from the employer for additional rock socketingbecause of the terms of the contract it had entered into.

23 Geospecs’ submissions miss the point of the factual foreseeability requirement. As stated by theCourt of Appeal in Spandeck (at [75]-[76]), factual foreseeability is a threshold condition that isreadily satisfied in most cases as the foreseeability threshold merely requires that the defendantought to broadly know that persons in the position of the plaintiff would suffer harm or damage fromthe defendant’s carelessness – this involves the establishment of a factual foundation upon whichlegal proximity can be founded (see Ngiam Kong Seng and another v Lim Chiew Hock [2008] 3 SLR(R)674 (“Ngiam Kong Seng”) at [104]), but does not require the defendant to foresee the precise harmor manner in which the loss was suffered. In the context of a building project, soil investigation worksare required to decide on the foundations required for the building. The consultant engineer wouldrequire this information and test data to design the required foundations. The information and datawould also shape the terms and specifications of the piling contract to be awarded. That this is veryimportant or even vital information and data to the developer and his consultant engineer cannot begainsaid. If the soil investigation and tests are improperly conducted and the results are inaccurate, itcannot be disputed that the possible costs and time delays, financial and reputational consequencescould be crippling. The other parties who would clearly be most interested in the soil substrata wouldbe the piling and building contractors, both of whom would look at the soil investigation informationand data. Their contract work, method of work or construction and the temporary works will bematerially affected if the information and data is incorrect or misleading. It is my experience, and Ican take judicial notice of the fact, that in the larger construction contracts, the borehole logs areinvariably included as part of the contract documentation.

24 It was not surprising that Mr Tan Eng Gee (“Mr Tan”), a director of Geospecs, expresslyconceded in cross-examination that if the borehole logs provided by the company engaged to conductsoil investigation were wrong, the contractor who relied on the borehole logs to price his tender for apiling contract would also calculate the cost of the work and the time taken to conduct the work

inaccurately. [note: 14] A soil investigator would therefore expect that inaccuracies in his borehole logscould cause some form of economic loss – either in terms of loss of potential profit or actual lossesfrom the performance of the contract – to contractors in so far as the contractors would becalculating their tender prices based on an incorrect premise. In my judgment, the thresholdrequirement of factual foreseeability is evidently satisfied on the present facts.

Legal proximity

25 In Spandeck, the Court of Appeal described legal proximity (at [78]–[79]) as a “composite idea,importing the whole concept of the necessary relationship between the claimant and the defendant”,and cited with approval Deane J’s observations in the High Court of Australia’s decision in SutherlandShire Council v Heyman (1985) 60 ALR 1 that the requirement of proximity embraced the notions ofphysical proximity, circumstantial proximity and causal proximity, including the closeness of theparties, the directness of the relationship between the parties as well as the assumption ofresponsibility and reliance (at 55–56); the relative importance of each factor and the combinations ofthe factors was a legal question to be determined on the basis of legal reasoning, induction anddeduction.

26 The Court of Appeal further held that the two-stage test premised on legal proximity and policyconsiderations was to be applied incrementally by reference to analogous situations to see howcourts have reached their conclusions for these stages to determine whether the current limits ofliability should be extended: see [43] and [73] of Spandeck. The lack of a factual precedent shouldnot preclude the court from extending liability where it is just and fair to do so, taking into accountthe relevant policy consideration against indeterminate liability against a tortfeasor (ibid). I note thatalthough the Court of Appeal in Spandeck set out a single test for a duty of care and enunciated a

number of broad proximity considerations (at [77]–[82]), the factors to be considered in ascertainingwhether the requisite proximity exists depends on the precise factual circumstances, including thetype of harm: see for example, Spandeck, which emphasised the traditional test of assumption ofresponsibility and reliance in Hedley Byrne & Co Ltd v Heller & Partners Ltd [1964] AC 465 (“HedleyByrne”) in the context of economic loss; cf. Ngiam Kong Seng, which applied the three factors inMcLoughlin v O’Brian [1983] 1 AC 410 within the context of the first proximity stage in the SpandeckTest for a claim involving a duty of care not to cause psychiatric harm. The case before me is oneinvolving economic loss, and I analyse the factual circumstances primarily through the prism of thetwin criteria of assumption of responsibility and reasonable reliance, but with reference to otherconsiderations where relevant.

Statutory duty of a qualified person carrying out soil investigation works

27 Resource Piling laid great emphasis on a change in the legal regulatory landscape in relation tothe conduct of soil investigations. Counsel for Resource Piling, Mr Leo Cheng Suan (“Mr Leo”),submitted that in the aftermath of the infamous tilting of the Samsung Hub building in Church Street,the BCA now imposed an express statutory duty for site investigation to be carried out in a properand adequate manner and made it mandatory for a professional engineer to sign off any siteinvestigation report. Mr Leo relied on reg 31 of the Building Control Regulations 2003 (S 666/2003)(“BCR”), which provides as follows:

Site investigation

31.—(1) Where foundation, tunnels, site formation (including excavations) or related earthworksare proposed to be constructed or carried out on any premises, an investigation of the site shallbe undertaken by the qualified person appointed under section 8(1)(a) or 11(1)(d)(i) of the Act inrespect of the structural elements of the relevant building works in order to establish the typeand character of the ground and groundwater conditions on which the foundations, tunnels, siteformation (including excavations) or earthworks are to be constructed or carried out.

(2) Whenever any site investigation is to be carried out, the qualified person appointed undersection 8(1)(a) or 11(1)(d)(i) of the Act shall carry out proper and adequate site investigation —

(a) in accordance with the relevant standards and codes of practice; and

( b ) by conducting adequate investigation boreholes and other appropriate investigationmeans, in-situ field tests and laboratory tests to establish the ground and groundwaterconditions, their variability and the geotechnical aspects for the works to be carried out.

(3) Whenever any site investigation is to be carried out in respect of the building works, thequalified person appointed under section 8(1)(a) or 11(1)(d)(i) of the Act shall submit the siteinvestigation reports to the Commissioner of Building Control and in accordance with paragraph(4).

(4) All site investigation reports shall contain field and laboratory data, and tests and results,and shall be accompanied by a certificate from an appropriate professional engineer who, havingcarried out, supervised or directed the site investigation, certifies that he has verified theaccuracy of the information given in the site investigation report.

[emphasis in italics added]

Resource Piling submitted that changes were introduced by the Building Control (Amendment)Regulations 2008 (S 54/2008) (“Building Control (Amendment) Regulations 2008”) to place a duty onsoil investigators to carry out site investigation works properly and accurately, and that the intendedclass of direct beneficiaries of this statutory duty included contractors who relied on borehole logsproduced as part of the site investigation to tender for and carry out their works. It was contendedthat the existence of this statutory duty “enhanced” the legal proximity between Resource Piling andGeospecs, such that the latter owed the former a common law duty of care in negligence in additionto its statutory duty. Geospecs disagreed and argued that no issue of public safety arose on thefacts; the present case simply involved a commercial contract which was more expensive to performthan one party had originally anticipated.

28 It is well-established that the existence of a statutory duty does not ipso facto give rise to acommon law duty of care in negligence, although it may form part of the contextual backdrop or be arelevant factor in favour of or militating against the imposition of a duty of care (see Animal ConcernsResearch & Education Society v Tan Boon Kwee [2011] 2 SLR 146 (“Animal Concerns”) at [22]). Inparticular, the statutory duty may establish that the duty of care does not extend to the lossesarising from a transaction falling outside the purpose for which an allegedly negligent statement wasmade (see the observations of Lord Jauncey of Tullichettle and Lord Oliver of Aylmerton in CaparoIndustries plc v Dickman [1990] 2 AC 605 (“Caparo Industries”) at 661D–E and 651F respectively).Alternatively, the imposition of a common law duty of care may support or undermine the legislativeintention behind the statutory regime (see Tan Juay Pah v Kimly Construction Pte Ltd [2012] 2 SLR549 (“Tan Juay Pah”) at [53]–[54]). For present purposes, I will confine my discussion to the former,viz, the relevance of the statutory framework under the Building Control Act (Cap 29, 1999 Rev Ed)(“Building Control Act”) and BCR in so far as the nature and purpose of the statutory duty mayimplicitly create a special or close relationship in the form of circumstantial or causal proximity orsupport an inference of assumption of responsibility, such that legal proximity under the first limb ofthe Spandeck Test is established.

29 The present reg 31 was inserted by the Building Control (Amendment) Regulations 2008, andhad replaced the previous reg 31 on site investigation which stated:

Site investigation

31.—(1) Where foundations or related earthworks are proposed to be constructed or carried outon any premises, an investigation of the site shall be undertaken by the qualified personappointed under section 6(3)(a) of the Act in respect of the structural elements of the relevantbuilding works in order to establish the type and character of the ground on which the foundationor earthworks are to be constructed or carried out.

(2) The qualified person shall prepare and submit to the Commissioner of Building Control areport of any investigation under paragraph (1) containing recommendations on the measures tobe taken in connection with the construction or carrying out of the foundations or relatedearthworks so as to prevent any settlement or other movement which may impair the stability ofor cause damage to the whole or part of any adjoining premises or building.

The amended reg 31 extended the duty to apply to the construction of “tunnels” and “site formation(including excavations)”. It imposed a more specific and detailed set of duties on those qualified toundertake site investigation works, including the requirements in reg 31(2) that site investigationworks have to be done properly and adequately in accordance with the prevailing standards andcodes of practice and by conducting adequate investigation boreholes and other appropriateinvestigation means: see also the explanatory note to the proposed amendment of reg 31 in Annex A

of the circular issued by the Commissioner of Building Control dated 10 December 2007. Further, itengrafted an additional layer of checks in reg 31(4), which mandates that the accuracy of the resultsof the site investigation have to be verified and certified by a Professional Engineer. Regulation 50 ofthe BCR imposes criminal liability for the contravention of, inter alia, regs 31(1), 31(2) and 31(3), butthe BCR is otherwise silent on any concomitant civil liability.

30 The Building Control (Amendment) Regulations 2008 followed the amendments made by theBuilding Control (Amendment) Act 2007 (Act No 46 of 2007) (“BCAA 2007”) to the Building ControlAct. Mr Leo relied on the parliamentary debates during the passing of the Building Control(Amendment) Bill 2007 (“the Bill”) in support for the submission that the purpose of introducing therequirement for a Professional Engineer to verify the accuracy of the site investigation reports was to

“prevent the “Church Street incident” from recurring”. [note: 15] Mr Leo cited the speech of a Memberof Parliament, Mrs Lee Bee Wah (“Mrs Lee”), a Professional Engineer and former President of theInstitution of Engineers (see Singapore Parliamentary Debates, Official Report (20 September 2007)vol 83 (“the 20 September 2007 Parliamentary Debates”) at col 2082):

... I queried [BCA officers], in the past, which were the projects where they could show examplesthat if we introduced the [Professional Engineer] (Geotechnical) then they would have avoidedthe problem totally. Kong lie kong ker, they could only quote me Church Street. And I asked themwhich aspect of Church Street. In fact, to prepare for this, I had lunch with Church Street’s[Professional Engineer], and he also told me that he was doubtful with the introduction of[Professional Engineer] (Geotechnical). That problem could be avoided.

The Church Street incident in 2002, which is well known to those in the construction industry,involved the 30-storey Samsung Hub building that started to tilt during construction as thesuperstructure was loaded, ie, being built. There were allegations in relation to the soil investigation,the characterisation of the soil substratum and possible piling construction shortcomings. It causedgreat alarm as there were completed buildings nearby. However, it should be noted that theintroduction of the requirement for a Professional Engineer (Geotechnical) to supervise specific typesof works in the BCAA 2007 followed the inquiry into the Nicoll Highway collapse in 2004 and relatesonly to “geotechnical building works”, which do not include foundational works for buildings which areless than 30-storeys high: see the definition in s 2(1) of the Building Control Act and the then Ministerof State for National Development, Ms Grace Fu’s (“Ms Fu”) explanation of the regulation ofunderground building works in the BCAA 2007 (see the 20 September 2007 Parliamentary Debates atcols 2055-2056).

31 The comments that Mr Leo cited followed Mrs Lee's speech where she queried the need tointroduce the requirement of a Professional Engineer (Geotechnical) for piling works for projects of 30-storeys and above as professional civil engineers had been designing the foundations of high-risebuildings for many years, and suggested that the employment of a second professional engineer wasimpractical and unnecessary: see the 20 September 2007 Parliamentary Debates at cols 2068-2069.Ms Fu responded to this concern by explaining that any structural problems with the foundations ofhigh-rise buildings could have very serious consequences, and cited the Church Street incident as anexample: see the 20 September 2007 Parliamentary Debates at col 2074. It is difficult to see howMrs Lee’s comments support Mr Leo’s position; on the contrary, Mrs Lee was arguing that the ChurchStreet incident could not have been prevented even with the input of a Professional Engineer(Geotechnical). Mrs Lee’s comments were not directed at any proposed amendments to the BuildingControl Act that directly considered the duties of those engaged in specialised site investigationworks.

32 It is evident that the overarching purpose of the BCAA 2007, and the subsequent amendments

to the BCR, were to “strengthen the building control regulatory framework to uplift professionalism,standards of safety and quality in the construction industry”: see Ms Fu’s speech in the 20September 2007 Parliamentary Debates at col 2053. Apart from this broad statement of purpose, theBCAA 2007 was silent on the duties of a soil investigator, although the constant reference to theChurch Street incident suggests that it perhaps formed part of the catalyst for the BCAA 2007. (Ishould add that the Nicoll Highway collapse in April 2004 must have also been a major contributor butfrom a slightly different angle.) The BCAA 2007 introduced a requirement for those engaged in siteinvestigation works to be licensed as a specialist builder (see s 29G of the Building Control Act) andadditional duties on a soil investigator were inserted in the BCR by the amended reg 31. Thesechanges undoubtedly followed the overall purpose of the 2007 amendments in improving theaccountability and competence of those engaged in site investigation works to strengthen safetystandards. However, I do not think that there is anything to suggest that the changes introduced bythe BCAA 2007, or indeed the building regulatory regime as a whole under the Building Control Act,additionally have the statutory objective of protecting the economic interests of the variousparticipants in the construction industry or to define the scope of their responsibilities vis-à-vis eachother. The financial risks potentially incurred by contractors who rely on work done by othercontractors in the same project are not regulated under the Building Control Act. While it is clear thatspecialised site investigators in the position of Geospecs owe an express statutory duty to carry outproper and adequate site investigation under reg 31(2), in my view, there is nothing that can plausiblysupport a suggestion that Parliament intended for this duty of competence to extend equally tocontractors who rely on geological information provided by site investigators to price their tenders.

33 Contractors are not within the class of persons intended to be protected by the statutory dutyto carry out adequate and proper site investigation works, and I am thus of the view that reg 31 ofthe BCR is of minimal assistance to Resource Piling in establishing that the parties were brought into aclose and direct relationship or that Geospecs had assumed any responsibility, as part of its statutoryduty, towards Resource Piling in relation to the accuracy of its soil investigation logs.

Assumption of responsibility, reasonable reliance and the contractual framework

34 Resource Piling submitted that Geospecs was a soil investigation specialist and had to expectthat Resource Piling – as a potential bidder for the Piling Contract – would rely on the Geospecs Logsto price its tender. Resource Piling was also constrained to rely on the Geospecs Logs due to theshort window of time within which tenders for the Piling Contract had to be submitted. There wastherefore sufficient proximity between the parties.

35 Geospecs argued that there was no proximity between itself and Resource Piling. The GeospecsLogs contained only facts and did not purport to give any advice or make any representation to thirdparty contractors. Further, Resource Piling was aware, at the time it submitted the tender for thePiling Contract, that it should not rely on the Geospecs Logs but should instead satisfy itself of theactual ground conditions.

36 It is clear from the contractual provisions between the Developer and Resource Piling (set outat [5] and [6] above) that the risk of unexpected, different, difficult or adverse ground conditions fellupon Resource Piling. The Developer would not pay for any extra costs incurred by Resource Piling orgrant additional time to Resource Piling should it encounter such conditions. Under cl 1(o) of the PilingContract, Resource Piling’s rates, based on bored pile lengths, were to include any coring, chiselling,socketing into rock or use of special tools or equipment and all processes that were indispensablynecessary to achieve completion whether described or otherwise in the face of practical difficulties orfor other technical reasons. At the tendering stage, cl 1.6 of the General Specifications provided thatan “extract of the Soil Investigation Report [was] enclosed…for information” and cl 1.2.3 of the Bore

Pile Specifications stated that the Geospecs Logs was for Resource Piling’s reference only and thatneither Longrove nor the Developer accepted responsibility for the accuracy of the Geospecs Logs ifthe actual soil conditions encountered were different.

37 Both parties made use of aspects of this allocation of risk. Resource Piling argued that since theGeospecs Logs formed an integral part of the Piling Contract, Resource Piling should therefore beentitled to rely on the accuracy of the Geospecs Logs as it would have no other recourse for losses ifthe Geospecs Logs did not provide an accurate approximation of the ground conditions at the Site.Geospecs submitted that it only had a contractual relationship with the Developer and hadsatisfactorily discharged its duties in accordance with the Soil Investigation Contract. As ResourcePiling was not contractually entitled to claim for the additional cost of rock socketing from theDeveloper over and above the fixed contract sum, a fortiori, it should not be allowed to claim thesame from Geospecs.

38 Resource Piling’s argument can be characterised as a claim of assumption of responsibility byGeospecs and corresponding reliance by Resource Piling. Although of considerable vintage, HedleyByrne continues to be the starting point in many other Commonwealth jurisdictions for claims involvingnegligent misstatements. Lord Devlin’s formulation of the test as to when a duty of care not to causeeconomic loss by making negligent statements arises can be found at 528–529 of Hedley Byrne:

... the categories of special relationships which may give rise to a duty to take care in word aswell as in deed...include also relationships which...are "equivalent to contract," that is, wherethere is an assumption of responsibility in circumstances in which, but for the absence ofconsideration, there would be a contract. [emphasis in italics added]

The Hedley Bryne elements have been incorporated as part of the first proximity limb of the SpandeckTest at [81]:

In our view, Deane J's analysis in Sutherland, that proximity includes physical, circumstantial aswell as causal proximity, does provide substance to the concept since it includes the twin criteriaof voluntary assumption of responsibility and reliance, where the facts support them, asessential factors in meeting the test of proximity. … [emphasis in italics added]

Assumption of responsibility is to be understood in a legal rather than factual sense. It thereforerefers to “the circumstances in which the law will deem the maker of the statement to have assumedresponsibility to the person who acts upon the advice” (per Lord Griffiths in Smith v Eric S. Bush andHarris v Wyre Forest District Council [1990] 1 AC 831 at 862; see also the observations of Phang J(as he then was) in Sunny Metal & Engineering Pte Ltd v Ng Khim Ming Eric (practising under thename and style of W P Architects) [2007] 1 SLR(R) 853 at [63], citing Andrew Phang, Cheng Lim Sawand Gary Chan, "Of Precedent, Theory and Practice - The Case for a Return to Anns" [2006] Sing JLS1 at pp 47-48 that the concept of proximity is “not merely factual but is, rather, legal in nature”).

39 I first dispose of the argument that was repeatedly stressed by Geospecs in its submissions,viz, that Resource Piling could not claim to have been negligently misled by the Geospecs Logs as theGeospecs Logs contained purely factual statements. The basis of liability for negligent misstatements,either under the Hedley Bryne principle or the Spandeck Test, is that one party may owe a duty ofc are to another not to provide information negligently; it is not dependent on whether suchinformation may be classified under the semantic categories of “facts” or “advice”. I am, with respect,unable to comprehend how this apparent distinction changes the character of any responsibility thatGeospecs may have undertaken with respect to Resource Piling or the nature of Resource Piling’sreliance on the Geospecs Logs. In this regard, I need only refer to the observations of Lord Steyn in

Williams v Natural Life Health Foods Ltd [1998] 1 WLR 830, at page 834D-H:

It is clear … that the governing principles are stated in the leading speech of Lord Goff ofChieveley in Henderson v Merrett Syndicates Ltd [1995] 2 AC 145. First in Henderson’s case itwas settled that the assumption of responsibility principle enunciated in Hedley Byrne & Co Ltd vHeller & Partners Ltd [1964] AC 465 is not confined to statements but may apply to anyassumption of responsibility for the provision of services. … [emphasis in italics added]

T h e Hedley Bryne principle is conceptually premised on assumption of responsibility and acorresponding reliance, and does not turn on minute classification of what was said or done.

40 The present claim by Resource Piling against Geospecs, who provided geological or subsoilinformation or conditions to the Developer, is a novel one and neither counsel directed me to anypreviously decided case in a Commonwealth jurisdiction where a duty of care was held to exist onmaterially similar facts. In accordance with the incremental approach of reasoning by analogyendorsed by the Court of Appeal in Spandeck (at [82]), I now consider earlier cases where the courtshave answered this broader question: does a professional owe a duty of care to a contractor wherethe contractor tenders for a contract on the faith of information prepared by the professional whodoes so under a separate contract with the contractor’s employer, but with whom the contractor hasno contractual relationship?

41 A close factual parallel can be found in the decision of the Court of Appeal of California in MMiller Co v Dames & Moore (1961) 198 Cal. App. 2d 305 (“Miller”), which predated the House of Lordsdecision in Hedley Bryne. It was alleged that negligent soil tests, which failed to disclose unstableground material, were carried out by the defendant soil engineering firm under contract with theemployer and their civil engineers. It was assumed for the purposes of the appeal that the report wasintended to provide information for prospective bidders, including the plaintiff contractor, and was infact made available to and relied upon by the contractor (at 307). As a result of the negligent report,the contractor’s bid was less than the actual cost of completing the project. The court held that onthe assumed facts, the soil engineering firm could be liable to the contractors in negligence under therule in its earlier decision in Biakanja v Irving (1959) 49 Cal. 2d 467, viz, damages for negligentperformance could be recovered if “the circumstances were such that the transaction was intendedto affect the plaintiff and injury to the plaintiff was foreseeable”. The court also rejected the defencethat the contract between the contractor and the employer specifically provided that the contractorwas not to rely on the soil report but was to make its own independent investigations; the rights andduties of the soil engineer as against the contractor were not necessarily equivalent to the scope ofthe liabilities that the contractor had chosen to waive in favour of the employer.

42 In my view, Miller is of limited guidance because it was decided at an interlocutory stage onsummary judgment principles. It arose from a motion by the defendant to dismiss the claim against itas disclosing no merit. It was therefore decided as a matter of law only on the basis of the assumedfacts set out in the preceding paragraph, including the plaintiff’s pleading that the defendant soilengineer had intended for the report to provide information for prospective contractors bidding for theproject. The summary judgment granted in favour of the soil engineering firm at first instance wasaccordingly reversed and the issue of negligence was sent for trial.

43 A similar conclusion and reasoning was adopted in Edgeworth Construction Ltd v ND Lea &

Associates Ltd (1993) 107 DLR (4th) 169 (“Edgeworth”), a decision of the Supreme Court of Canada.The Supreme Court held that an engineering firm which had prepared specifications and constructiondrawings for a highway project and the relevant tender documents incorporating such plans owed aduty of care to a contractor who had successfully tendered for the project and incurred economic

losses as a result of errors in the specifications and drawings. McLachlin J, delivering the leadingjudgment of the court, made the following observations on the assumption of responsibility by theengineering firm at [5]:

... The engineers undertook to provide information (“the tender package”) for use by a definablegroup of persons with whom it did not have any contractual relationship. The purpose ofsupplying this information was to allow tenderers to prepare a price to be submitted. Theengineers knew this . The plaintiff contractor was one of the tenderers. It relied on theinformation prepared by the engineers in preparing its bid. Its reliance upon the engineers’ workwas reasonable. It alleges it suffered loss as a consequence. These facts establish a prima faciecause of action against the engineering firm. [emphasis in bold italics added; emphasis in italics inoriginal]

McLachlin J then considered whether the contract between the contractor and the employer negatedthis prima facie duty of care, and held (at [9]) that although the specifications provided by theengineering firm had been incorporated in the contract and had also become representations of theemployer, they did not cease to be representations of the engineering firm. The contractor continuedto rely on the accuracy of the specifications and did not assume the risk of errors in the work of theengineering firm. The presence of a clause in the main contract between the contractor and theemployer negating any warranty of the accuracy of the information provided in the tender documentsalso did not extend to protect the engineering firm from liability (at [10]) and did not oust anypossible duties in tort that the engineering firm owed to the contractor (at [12]).

44 I am hesitant to draw any statement of general principle from Edgeworth as it similarlyconcerned a striking out application at an interlocutory stage. The Court of Appeal in Spandeck citedEdgeworth for the proposition that (at [107]):

… there might be situations where a negligent statement by the professional in preparing thetender documents would lead to liability under Hedley Byrne … but, in the absence of such astatement to the contractor, it seemed unlikely that a court would find a duty of care based onthe mere conduct of the professional.

From the very brief comment that Edgeworth drew from the Court of Appeal in Spandeck, it appearsthat the Court of Appeal gave a qualified and cautious interpretation of the decision as requiring astatement to the contractor instead of mere conduct of the third party professional in preparing thetender documents. The observations of McLachlin J (at [5]) that appear to suggest that theprofessional’s knowledge that the purpose of supplying the information was to allow contractors toprepare a tender could amount to an undertaking by the professional must be read in the context ofthe factual scenario in Edgeworth. Edgeworth concerned a situation where the professional providedthe information for the specific purpose of preparing a tender package that would be relied upon bypotential contractors and was involved in the preparation of the tender package; this may, dependingon the facts, go beyond mere knowledge and foreseeability.

45 The New Zealand Court of Appeal came to a different conclusion in R M Turton & Co (inliquidation) v Kerslake & Partners [2000] 3 NZLR 406 (“R M Turton”). The employer, a healthauthority, engaged architects to design a hospital building, oversee the tendering and supervise theconstruction. The architects engaged an engineering firm to advise on the engineering aspects,including the mechanical services specifications and the corresponding subcontract, and to supervisethe engineering side of the construction. The mechanical services included a heating system thatrequired identified models of heating pumps with a minimum output capacity of 185 kw output undercertain specified conditions. There were also fairly detailed specifications on the oil cooler, condenser

and evaporator required for the heating system. The plaintiff company R M Turton & Co (“Turton”)obtained the tender documents from the architects, including the mechanical services specificationswhich it passed on to its mechanical subcontractors NZ Mechanical and George Mechanical Ltd(“George Mechanical”). Turton submitted a bid which nominated NZ Mechanical, who tendered at acheaper price based on substituted heat pumps, as their preferred subcontractor and GeorgeMechanical as the alternative subcontractor. Turton’s tender based on the specified heat pumps, witht he compliant tender submitted by George Mechanical, was accepted. Upon construction, it wasfound that the heat pumps were unable to produce the required 185 kw output. The trial judge foundthat this inability was due to the performance inadequacy of the specified evaporators within theheat pump packages supplied to George Mechanical, and these packages in essence comprised shelfitems. Turton had to bear the costs of remedial works. Turton commenced proceedings against theemployers, the architects and the engineers for the cost of the remedial works, alleging that themechanical services specifications had been negligently prepared. The District Court allowed part ofTurton’s claims against the employer but dismissed the claims against the architect and engineers,holding inter alia, that Turton had assumed the contractual obligation to provide heat pumps whichwould achieve the specified performance criteria. On appeal, the High Court upheld the District Court’sconclusion that the engineers did not owe a tortious duty of care to Turton.

46 In the Court of Appeal, Henry and Keith JJ agreed and upheld the decision of the High Courtthat the engineers did not owe a duty of care to the contractor. There had been a careful allocationof risk for the negligence of the engineers (at [26]) and the imposition of a duty of care would “cutacross and be inconsistent with the overall contractual structure defining the relationships of thevarious parties” (at [32]). Applying the principles in Hedley Bryne, the majority further held (at [28]–[30]) that the engineers were not possessed of a special skill that the contractor was relying upon,and there was thus no justification for holding that the engineers had voluntarily assumed aresponsibility to the contractor. Notably, the majority distinguished Edgeworth and expressly departed(at [35]) from the approach of the Supreme Court of Canada in finding a prima facie duty of carethat may subsequently be negated by the relevant contractual framework; instead, the imposition ofthe duty would depend on a consideration of all the circumstances, including the contractualframework.

47 Thomas J issued a robust dissent, disagreeing with the findings of the majority that theengineers had not assumed responsibility for the accuracy of the specifications or that the contractorhad not reasonably relied on the specifications (at [84] and [86]). Thomas J also held (at [109]) thatthe contractual structure did not preclude the liability of the engineers to the contractor on the basisof the principles in Hedley Byrne, and approved (at [120]) of the basic logic underlying the reasoningof the Supreme Court of Canada in Edgeworth, viz, that proximity was made out once the elements ofassumption of responsibility and reliance were satisfied and the tort law of negligence would as, ageneral rule, apply unless negated by contract.

48 I now turn to two English cases, a decision of the Court of Appeal in J Jarvis and Sons Ltd vCastle Wharf Developments and others [2001] EWCA Civ 19 (“J Jarvis”) and a more recent High Courtdecision in Galliford Try Infrastructure Ltd and another v Mott MacDonald Ltd [2008] EWHC 1570(“Galliford Try”).

4 9 J Jarvis involved facts that are not found in the usual building contracts. The employer wasengaged to provide an office tower for Northcliffe, a newspaper company. The tower was in aprominent and sensitive location in Nottingham and was constrained by planning requirements; thetown planners, who wanted to retain Northcliffe’s commercial presence in Nottingham, took a closeinterest in the approval of plans for that tower. The employer was determined to obtain planningpermission but nonetheless wanted the least expensive scheme satisfactory to Northcliffe. The

planners, on the other hand, wanted to exercise control to ensure high quality design andarchitecture and imposed unusually onerous conditions for approval. The employer and theirarchitects, Franklin Ellis, had many meetings with the planners over the planning approval and designof the tower. The employer also engaged the defendant, Gleeds, a quantity surveyor, to coordinatethe construction project and pass information to contractors. When the employer thought it hadplanning approval on a certain basis, it got Gleeds, on its behalf, to invite Jarvis to tender for thedesign and construction of the tower. That invitation enclosed various documents, plans and drawingsand Employer’s Requirements which was expressed to contain a summary of known constraints toassist Jarvis in formulating proposals and submitting a tender. The contract was eventually awardedto Jarvis and many problems subsequently ensued in the obtaining of planning permission. Jarvisbrought claims alleging that the employer, Franklin Ellis and Gleeds had been negligent. The relevantaspect of this case involved Jarvis’ claim that Gleeds owed it a duty not to misrepresent that thescheme contained in its contractor proposals would comply with the planning permission that hadbeen obtained and that Jarvis had relied on such misrepresentations. After an 18-day trial on thepreliminary issues, the trial judge held that, inter alia, Jarvis was entitled to recover for loss anddamage caused by negligence for which the employer and Gleeds were responsible and dismissed thedefence that Jarvis was contributorily negligent. On appeal, the Court of Appeal allowed the appealand dismissed Jarvis’s claim against Gleeds.

50 The Court of Appeal recognised (at [51]) that the English courts had been slow to recognise aduty of care where a professional agent provides information to a third party with whom his principalhas, or is about to enter into, a contractual relationship. However, the court went on to state that itwas prepared to assume, without deciding the point, that Gleeds could owe a duty of care to theplaintiff contractor who tendered on the basis of the information provided, and made the followingstatement of general principle (at [53]):

... There is no reason in principle why the professional agent of the employer cannot becomeliable to a contractor for negligent misstatements made by the agent to a contractor to inducethe contractor to tender, if the contractor relies on those misstatements. But whether a duty ofcare in fact arises in any given situation must depend on all the circumstances, including inparticular the terms of what was said to the contractor.

After going through the facts in great detail, the Court of Appeal held that the factual findings of thetrial judge, who had sadly died in the meanwhile, were uncertain and the court was unable to reach aconclusive decision that the quantity surveyor did in fact owe the contractor a duty of care (at[59]). The Court of Appeal therefore did not provide any detailed reasoning for the preliminaryconclusion that a duty of care was not strictly precluded, nor did it make any affirmative finding onthis basis. I note that the Court of Appeal confined the potential liability to negligent misstatementsthat were made by the agent to induce the contractor to tender; it did not include any misstatementthat came to the contractor’s knowledge or was conveyed to him.

5 1 Galliford Try involved a claim by a contractor, who undertook a design-and-build project, foreconomic losses it had suffered as a result of delays and additional redesign work that it had notadequately factored into its contract price due to carelessly provided information by the consultingengineers. Although the engineers had liaised extensively with the contractor and had provided tenderinformation directly, Akenhead J held that the engineers did not owe the contractor a duty of care asthere was no assumption of responsibility by the engineers, who were at all material times employedonly by the main developers of the project and had not been involved in the contractor’s pricingplans. Akenhead J further observed (at [315]):

In the ordinary course of events, I have no doubt that an architect or engineer engaged by a

developer would not owe any duty of care (at least in relation to economic loss) to tenderingcontractors even though the latter had been supplied by the architect or engineer with tenderinformation, drawings and specification upon which to base their tenders. The successful tendererwould be considered to have taken the risk in respect of that information. …

The judgment in Galliford Try comprised some 424 paragraphs where the judge went into great detailto analyse the evidence and facts to see whether a duty of care arose under the Hedley Byrneprinciples. His judgment bears reading also because the learned judge was a leading construction silkin his day.

52 Two threads are discernible from the above cases. First, in my view, statements made orinformation prepared by third party consultants employed by the employer that is given to prospectivecontractors are not, without more, to be treated as statements or information which constituteHedley Byrne type statements, information or advice leading to liability. It is normal in the context ofa building contract for consultants to convey information and, without more, there is no imputation ofany assumption of responsibility by the consultants. Secondly, the manner in which the variouscontracts are structured and how risk has been allocated between the various parties forms theindispensable context and is an important factor in analysing whether the contractual relationshipsshow or support intentions regarding the assumption or allocation of risk or responsibility inconsistentwith the claimed duty in tort. The various contractual provisions which bind different parties have tobe considered. Building and construction contracts for larger projects are all about the allocation ofrisk and responsibility; often, tied to that risk is the responsibility of insuring risks that are insurable.In referring to claims under the Hedley Byrne principle, Akenhead J made the following observation (at[190(c)] of Galliford Try):

It is always necessary to consider the circumstances and context, commercial, contractual andfactual, including the contractual structure, in which the inter-relationship between the parties toand by whom tortious duties are said to be owed arises. Thus, it is not every carelessmisstatement which is actionable or gives rise to a duty of care. Foreseeability of loss is notenough.

Whilst factually most contractors will rely on information gleaned from tender documents, includingthe drawings and specifications, what is relevant is the issue of legal assumption of responsibility andreliance.

53 With these principles in mind, I now turn to the facts of the case. Four factors stand out inrelation to Resource Piling’s claim that Geospecs owed it a duty of care.

54 First, Geospecs is a specialised soil investigator and in carrying out its soil investigations on asite, it must know that three persons or groups would, or potentially would, rely on the informationand data it produces. I have already mentioned the developer and his consultant engineer. Thedeveloper’s engineer would want to know the subsoil conditions so that he can design and choose thekind of foundations required and the developer would want to know the cost of construction and thetime it would take for the construction. The other group would be the contractors – the pilingcontractor and the superstructure contractor. They would need to know the subsoil to decide on thekind of temporary works required and construction methodology. In the present case, the Developerintended to construct basement car parks which would involve excavation. In addition, there wereother buildings and structures in close proximity to the site, including the MRT line and reserve, anddifferent construction methods might be necessitated by different types of subsoil conditions.Underlying those interests are those of the insurers and their specialist reinsurers (who often bear 90to 95% of the eventual risk) who have become increasingly interested in subsoil conditions as one of

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the main factors to rate the risk.

55 Secondly, in the context of the Singapore building construction industry, Geospecs wouldreasonably expect and know that at least the Geospec Logs would be made available to thecontractors tendering for the piling and superstructure works. Geospecs initially pleaded that it didnot know that the Geospecs Logs would be incorporated into the Tender Documents; fortunately fortheir credibility, Mr Tan candidly conceded during cross-examination that he was aware that the

Geospecs Logs would be provided to the piling contractors to price their bids: [note: 16]

Mr Tan, when you drilled the bore hole, did you know it would finally be given to pilingcontractors to price their tender?

Yes.

...

But logically, you have been in this trade for so long, you should know that ultimately it willform part of the tender specification to call for tender.

Yes, but how they incorporate the document to the tenderer, we don’t know.

That’s a fair point, okay. For these contractors, your bore hole would be relied on to tender,correct?

Yes.

It would have been entirely unrealistic for Mr Tan to contend otherwise given the prevalent industrypractice. Geospecs therefore must have foreseen and was probably aware at the material time thatthe Geospecs Logs would be relied upon in some form by a contractor in the position of ResourcePiling or the main contractor for the superstructure. It is my experience, and I can additionally takejudicial notice of the fact, that in the larger construction contracts, the borehole logs are invariablyincluded as part of the tender and eventual contract documents.

56 Thirdly, although cl 1.6 of the General Specifications stated that Resource Piling was given theoption to conduct its own soil investigations before tendering if it so wished, piling contractors areseldom given enough time to carry out soil investigations of their own in the short time intervalbetween collecting the tender documents and the deadline for the submission of tenders. Thisnecessitates piling contractors relying on the borehole logs of soil investigators to submit their tenderbids. Resource Piling alluded to this in the evidence of Mr Foo, who claimed that although ResourcePiling was contractually entitled to conduct its own soil investigation, it was not practically possibleto do so within the two week time frame to submit its tender; Resource Piling therefore had no choice

but to rely on the Geospecs Logs. [note: 17] This is the reality in Singapore’s building contractenvironment, and I recognise that this is a necessary constraint under which most, if not all,contractors have to operate.

57 Having said that, what exactly is meant by “relying on” the borehole logs to price or base theirtender bids? In my judgment, there is no mathematical correlation (as compared to assumptions,extrapolation and estimation) between the pricing methods used by piling contractors and theborehole logs. The borehole logs are invariably used by piling tenderers to give them an approximateidea of the general soil conditions. They do not calculate the length of the pile through differentlayers of soil with different costing on each layer and then build up the price of the piles. They look,

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for example, for the depth of the water table and whether underground water will be a problem; theymay generally see if there is marine clay and if so how thick the layer is, what depth it is at and whatthe sandwiching layers of soil are; they may look generally to see what the lower layers consist of sothat they know if they have to socket into rock and what length the socketing has to be or whetherthey will have difficulties with ‘soft toes’ at the foundation levels which may affect the end-bearingcapacity of the pile. They may want to know if driven piles into the subsoil may cause excessivevibration and damage to neighbouring properties or buildings. These factors affect construction andthe time to do so.

58 I accept that if a piling contractor sees a rock layer underlain by softer layers, he will have tobore through that layer before reaching the foundation level and that may affect price. Also, if thereare large boulders, measures will have to be taken to avoid any mistakes in construction based on anerroneous assumption that the foundation level has been reached. The presence of rock at thefoundation level is seldom a problem as all it means is that the piling contractor should check thedrawings or specifications to see the depth of and therefore his cost estimate for the socketing.However, Resource Piling’s case is on a broader front – the Geospecs Logs only indicated rock aroundone area (the north-eastern corner of the larger Western plot around BH-5 and BH-6), whereas theyencountered rock in almost every other area of the Site. I will deal more fully with this below as thereare other factors to be taken into consideration.

59 Fourthly, there was no disclaimer of responsibility or a notation or clause – which is sometimesfound in soil investigation reports – to the effect that the Report was prepared solely for and for thepurposes of the developer and its consultant and that the maker expressly accepts no responsibilitytowards any other third party whatsoever and who relies on the same at his own risk. The terms onwhich Geospecs provided the soil investigation results to Longrove or the Developer clearly did notcontain an express disclaimer as to the accuracy of the Geospecs Logs. Although Mr Tan assertedthat Geospecs had preserved its position in this respect, he could only point to a single line in the

Report when cross-examined: [note: 18]

Yes. Where is your disclaimer?

...

... “The pile penetration length, may, however, depend on the type of piling system to beadopted, on any inherent special variations of the substrata and on the intended loads to becarried out by the piles. Presence of boulders probably due to differential weathering isexpected within the residual layer.”

So this presence of boulders if already found in bore hole 6, so it could have it in any part ofthe site.

This would be the disclaimer you are talking about?

Yes.

This statement was clearly not in the nature of an unambiguous and unequivocal disclaimer ofresponsibility that sufficed to exclude a prima facie assumption of responsibility.

60 However, in my judgment, although I am satisfied that Resource Piling was not practically ableto ascertain the accuracy of the Geospecs Logs and that Geospecs had knowledge that theinformation contained in the Geospecs Logs would be conveyed to and relied upon by Resource Piling

to price their tenders, these per se are not sufficient to establish proximity. On the contrary, thereare at least five other countervailing factors that militate against a finding that there was anassumption of responsibility by Geospecs or a corresponding reasonable reliance by Resource Piling.

61 First and foremost, Geospecs was engaged by the Developer to conduct soil investigations,ascertain water table measurements, record field Standard Penetration Test (“SPT”) values, obtainundisturbed samples to enable tests to be carried out to obtain information on moisture content, bulkdensity, Atterberg limits, shear strength in triaxial compression and consolidation and other data forthe Developer and its consultant for the purposes of pile design. This was expressly stated in thescope of works in the Soil Investigation Contract and the articulated purposes of the investigation. Iaccept that once the engineer has decided on the choice of piles and the foundation design based onthe Report, information from this Report, including the Geospecs Logs, would be used to prepare thetender specifications and drawings for tender.

62 Secondly, the Soil Investigation Report was not primarily for tendering purposes and neither wasit for any express purpose of enabling the piling tenderer to calculate his price. The Report consistedof some 203 pages. The Geospecs Logs for the 11 boreholes only comprised some 22 pages. TheReport itself comprised 11 pages. The rest, which formed the bulk of the Report, were mainly detailedtest data and results, graphs and laboratory test results which were clearly intended not for a pilingcontractor’s use but for Longrove’s use in designing the foundations. The Report also containedGeospecs’ recommendations for the type of soil encountered and the recommended pile to be used.There was no passing of such information directly from Geospecs to Resource Piling, and neither wasthe Report addressed directly or indirectly to Resource Piling as the successful piling tenderer. In fact,there was no evidence before me that there was any immediate contact between Geospecs orResource Piling right up to the time that the writ of summons was filed. All communications took placethrough the Developer or Longrove.

63 Thirdly, and consequent upon the second reason, only a small part of the entire Report wasmade available to Resource Piling, namely, the Geospecs Logs. Clause 1.6 of the GeneralSpec ifications stated that “an extract of the Soil Investigation Report [was] enclosed…forinformation” [emphasis added], and it was thus clear that the full Report was not included. It isnoteworthy that soil investigation, if properly done, only gives a snapshot of the cross-section of thesoil which the bore went through. It does not say what the soil is ten metres away. If anotherborehole is sunk 20 metres away, then only a very approximate extrapolation of the likely soil profile isobtained by placing these borelogs at two ends of a page and connecting the layers. Sometimes,three or more borelogs are used in this fashion when extrapolating the likely soil profile along a longeraxis. The point is, the analysis is not continuous, and because this is after all an extrapolation, itcannot show exactly the precise different soils or boulders or rock which may exist between any twoboreholes. It has to be remembered that soil investigation borelogs are by their very nature limited innumber across a much larger site and do not necessarily accurately profile the subsoil at a site; thatis why employers and their consultants in Singapore always provide that the risk of different oradverse soil conditions is on the piling or superstructure contractor. Geospecs sank 11 boreholeswhereas Piling Resources had to construct 442 bored piles across the site. These are facts, generalas well as particular, that have to be weighed in deciding whether the first test of proximity can besatisfied.

64 It is therefore erroneous for Resource Piling to say that only two (BH-5 and BH-6) out of the 11boreholes drilled by Geospecs indicated the presence of rock and that they could therefore anticipatethat approximately only 18% of their piles would encounter rock, or that two out of 11 of theboreholes, which were adjacent to each other, indicated the presence of rock and that ResourcePiling could therefore safely extrapolate that it would not encounter rock elsewhere across the Site.

That was therefore an assumption Resource Piling made. It accordingly took the risk, in the

contractual context, of that assumption being wrong. Mr Foo’s evidence [note: 19] clearly bears outhis extrapolation and therefore assumptions he made in working out his tender price. Geospecs alsopointed out (in my view very validly so, given the context), that they did not know the Report was

not made available to Resource Piling. The Report stated at p 11 that: [note: 20]

Piles may be founded within the very dense/hard/weathered rock stratum … Presence of bouldersprobably due to differential weathering is expected within the residual layer. [emphasis in italicsadded]

Although this does not say rock can be expected, it clearly opines that boulders can be expected, ie,drilling or coring through boulders may have to be carried out before reaching the layers below them.Therefore, while I would accept that it was reasonable for Resource Piling to have relied on theGeospecs Logs as one of the considerations in preparing their tender, I do not think it can be saidwith equal strength that it was reasonable to rely on the Geospecs Logs as enabling them todetermine with accuracy that only 18% of the piles would hit rock. There was an element of risk thatis inherent in extrapolating the overall soil profile of the Site based on 11 data points, and I believethat Resource Piling must have been aware of that.

65 Fourthly, also of importance is that there are different ways in which piling contractors pricetheir works and Geospecs would not know which pricing structure would be adopted as between theDeveloper and Resource Piling. For bored piles, tenderers can price their piles by length and diameterof the pile with different rates for boring through soil, boring through soft soils (where there might bea need for additives to help stabilise the surrounding soil) and boring through rock or large boulderswhen they are encountered in the subsoil. They can also make provision for undergroundobstructions, like old structures sunken in the subsoil. There was no suggestion at all that Geospecswas aware how Longrove would structure the pricing for the tender or that Resource Piling wouldprice their tender purely by the length and diameter of the pile, irrespective of the type of soil itencountered in its construction of the bored piles. I note that in the case of Geospecs, it protecteditself by providing that its lump sum quote did not include rock coring and if required it would charge$150 per metre subject to a minimum of three metres per borehole. The bill of quantities issued byGeospecs also stipulated that boring in soil would be priced at a rate of $20 per metre whereasdiamond drilling through solid rock or material with SPT results of not less than 100 blows per 300mmwas at a rate of $180 per metre. I do not think there was evidence of any close relationship betweenthe parties as there apparently was in Miller or Edgeworth that would support the imputation of anassumption of responsibility on the part of Geospecs in relation to Resource Piling’s reliance on theGeospecs Logs for tendering purposes. It had not participated in the drawing up of the tenderdocuments or specifications or prepared the Geospecs Logs with the intention that it be used byResource Piling.

66 Fifthly, in the context of the Singapore building and construction industry, the risk of adversesubsoil conditions is variably borne by the contractor. None of the standard building contract formscommonly in use in Singapore provide otherwise. This is the well-known and accepted commercialenvironment of long standing that both Geospecs and Resource Piling operated within. Hence, theterms of the Piling Contract and Tender Documents repeatedly emphasised that as between theDeveloper and Resource Piling, the risk that the ground conditions may be different from thatindicated in the Geospecs Logs lay solely on Resource Piling:

(a) Clause 16(b) of the Piling Contract and cl 1.2.3 of the Bored Pile Specifications clearlyexcluded any warranty from the Developer and Longrove with respect to the accuracy of theGeospecs Logs and absolved the Developer and Longrove from any liability to Resource Piling on

this basis.

(b) Clauses 1.6 and 1.10 of the General Specifications and cll 1.2.3 and 4.2.4 of the Bored PileSpecifications expressly provided that the contractor tendered for the piling work on the Site ona fixed price per metre basis and no extra cost or time would be allowed in the event that difficultground conditions were encountered on the Site.

(c) Clauses 7 and 11(d) of the Piling Contract, cl 1.6 of the General Specifications and cl 1.2.2of the Bored Pile Specifications stated that Resource Piling was deemed to have inspected theSite and satisfied itself as to the ground and subsoil conditions.

The cumulative effect of these contractual terms was that Resource Piling accepted by its contractthat it was not entitled to claim extra payment for the additional costs of coring through rock, ie, noextra payment would be due if there were unanticipated conditions that rendered the piling work moreonerous or expensive to perform in accordance with the contractual specifications. Also, by contract,Resource Piling accepted payment according to a single variable of the length of the bored piles; thiswas an all inclusive price whether or not Resource Piling had to bore or core through soft soils,medium stiff soils, hard soils or rock or had to use any special tools or equipment.

67 Given the factual circumstances surrounding the relationship between Geospecs and ResourcePiling, including the fact that this relationship was not formed directly but through the conduit of thecontractual relationship between Resource Piling and the Developer, I am of the view that apart fromGeospecs’ knowledge that prospective piling contractors would rely on the Geospecs Logs to price thetender, there was no other element which would justify the imputation of an undertaking ofresponsibility by Geospecs. There was no physical proximity in terms of immediacy of relationship, norwas there circumstantial proximity in the sense of Geospecs performing the soil investigation on behalfof the Developer for the immediate purpose of conferring some benefit on Resource Piling or to assistResource Piling. As Mr Tan averred – and this was confirmed by Resource Piling’s expert witness DrTing Seng Kiong (“Dr Ting”) – the borehole logs were prepared to enable the project engineer todesign the foundations and to prepare the engineer’s estimate and tender specifications. Geospecs’information was thus provided to the Developer for the primary purpose of the planning and design ofthe foundations; the contractors who relied on the information to price their tenders were ancillaryrecipients of that piece of work. Most crucially, I find that the overall contractual and commercialcontext – as the two general threads running through all the factors above – explicitly and implicitlyevinces the parties’ intentions to allocate the entire risk of any economic loss arising frominaccuracies in the information provided in the Geospecs Logs to the contractor tendering for thepiling work on the Site. This undermines any direct assumption of responsibility by Geospecs toResource Piling. It was Resource Piling that failed to adequately price for the risk that it undertook.

68 I recognise the possible countervailing argument that it does not follow that Resource Piling isnot entitled to claim from Geospecs in tort because R